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Minnesota issues executive order regarding garnishment during Covid-19
On May 4, the Minnesota governor issued an executive order that classifies recovery rebates under the CARES Act as “government assistance based on need” under Minnesota Statutes 2019, section 550.37, subdivision 14. As a result, such recovery rebates are exempt from all claims by creditors, except claims for domestic support obligations. Additionally, for purposes other than domestic support obligations, state, local, and tribal government payments issued to relieve consumers of the adverse economic impact caused by Covid-19 are also considered government aid and, thus, exempt from claims by creditors. The order also suspends the provisions that permit: (i) service of a garnishment summons on a consumer debtor of consumer garnishee; (ii) prejudgment garnishment on a consumer debtor, and (iii) a judgment creditor to obtain information about a consumer debtor’s assets, liabilities, and personal earnings. The order will remain in effect until the peacetime emergency declared in Executive Order 20-01 is terminated or until the order is rescinded.
Illinois Department of Financial and Professional Regulation announces initiative to facilitate cashing of stimulus checks
On May 1, 2020, the Illinois Department of Financial and Professional Regulation announced plans to provide new options for unbanked Illinoisans to cash their stimulus checks for free. The announcement highlights some of the banks that are willing to offer such services and provides resources that consumers can consult in connection with receiving their economic impact payments.
Colorado extends suspension of 2020 property tax deadlines
On May 1, the Colorado governor issued an executive order extending the temporary suspension of calendar year 2020 statutory deadlines concerning taxpayer filing requirements for certain taxable property in light of the spread of Covid-19. The State Board of Equalization within the Department of Local Affairs is permitted to promulgate any necessary emergency rules regarding the extension of filing deadlines.
Massachusetts regulator urges premium finance companies to work with customers
On May 1, the Massachusetts Division of Banks issued guidance to insurance premium finance companies, stating that it “expects” them to provide relief and flexibility to customers during the Covid-19 pandemic. The division issued the guidance in light of a March 23 bulletin in which the Massachusetts Division of Insurance urged Massachusetts insurance carriers to take steps to preserve individual access to insurance coverage.
CFPB: Substantial decline in credit applications in March
On May 1, the CFPB released a report examining the early effects of the Covid-19 pandemic on credit applications in March, concluding there was a substantial decline compared to previous years. Specifically, the report compared “hard inquiry” volume from credit checks for auto loans, mortgages, and credit cards by lenders during the month of March with the same data from previous years. Among other things, the report notes that auto loan inquiries dropped by 52 percent, new mortgage inquiries dropped by 27 percent, and credit card inquiries declined by 40 percent, as compared to usual data patterns from previous years. The report noted variations based on credit score and geography. The drops in inquiries were more pronounced for consumers with higher credit scores, and in states in the Northeast and California. The report noted a strong correlation between states with a higher Covid-19 case rate and the significance of the drop in auto loan and new mortgage inquiries. A similar correlation was also found between states with a larger share of workers entering unemployment and a drop in the same credit inquires.
FDIC issues regulatory relief for areas in Tennessee affected by severe storms
On April 28, the FDIC issued FIL-51-2020 to provide regulatory relief to financial institutions and help facilitate recovery in areas of Tennessee affected by a recent series of severe weather. In the letter, the FDIC encourages institutions to consider, among other things, (i) extending repayment terms; (ii) restructuring existing loans; or (iii) easing terms for new loans to borrowers affected by the severe weather, provided the measures are “done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.” Additionally, the FDIC notes that institutions may receive Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery. The FDIC states it will also consider relief from certain filing and publishing requirements.
Find continuing InfoBytes coverage on disaster relief guidance here.
D.C. attorney general alerts residents about debt collection protection
On April 30, D.C. Attorney General Karl Racine issued an alert informing district residents about debt collection protection during the Covid-19 crisis. According to Racine, residents are protected from the majority of debt collection activities during the state of emergency in place for the district. The consumer protections are a result of a proposal passed by D.C. Council on April 10, and are valid throughout the state of emergency plus an additional 60 days afterwards.
Alabama State Banking Department issues memorandum to licensees to work with customers
On April 29, the Alabama State Banking Department issued a memorandum encouraging licensees to work proactively with customers and to keep the department apprised of such efforts. Licensees are also reminded to work with customers to make sure they are aware of the potential for scams during the COVID-19 pandemic. The department should be notified of any suspicious lending-related activity.
Wisconsin regulator bars penalties for late/missed rent payments
On April 29, the Wisconsin Department of Agriculture, Trade, and Consumer Protection adopted an emergency rule that prohibits landlords from assessing late fees or other penalties for missed or late rent payments during Covid-19 public health emergency. The rule is in effect until 90 days after the public health emergency ends.
Maryland governor prohibits garnishment of CARES Act recovery rebates
On April 29, the governor of Maryland issued an executive order prohibiting any garnishment or setoff of CARES Act recovery rebates. The order also provides that Maryland-incorporated banks and credit unions have no right of setoff or lien upon funds in a customer or member’s account that are traceable to a CARES Act recovery rebate.